Budget is constraining a Search Ads 360 bid strategy's performance

Campaign budget impacts impression share

The message indicates that some campaigns in the Search Ads 360 bid strategy's portfolio don’t have enough budget to show your ads throughout an entire day. As a result, the portfolio will likely miss out on gaining additional conversions for a specified target.

In Google Ads, a budget constraint is indicated by the percentage shown in Search Lost Impression Share (budget) column. Lost impression share is the percentage of time ads aren't shown because of a limited campaign budget.

With enough budget, a bid strategy may be able to drive more conversions at the same return on investment because the Search Ads 360 optimization system will shift spend to high-performing campaigns that have limited impression share due to the daily budget.

If the budget is insufficient (and limiting impressions), the bid strategy algorithm's can't make necessary tradeoffs to spend more on higher-performing campaigns, because it can't run out of budget. The algorithms perform better when they have the freedom to make tradeoffs in the portfolio.

For example, if a bid strategy has a high performing campaign with 50% Lost IS (budget), the bid strategy could increase keyword bids which will very likely result in fewer clicks for the same cost in a given day. As a result, the bidding algorithms will end up shifting spend (by increasing bids) to a lower-performing campaign with 100% impression share.

If your top-level objective is to maximize your ROI (for example, maximize conversions for a $50 CPA), the best approach is to increase campaign daily budgets until they are no longer adversely impact impression share. That is, 0% is displayed in the Search Lost IS (budget) column.

Using the bid strategy health panel, you can allow the bid strategy to gradually increase the budgets of specific campaigns over a couple of weeks. For example you might spread an additional $1000 across specific campaign budgets.

For bid strategies that have a monthly spend target, the campaign budget should exceed the target spend by a reasonable margin. Daily spend limits are not recommended, but if they’re used, the limit should be high enough to allow for natural fluctuations in day-to-day spend. Because a bid strategy with a monthly spend target already has a mechanism for controlling spend, we recommend a relatively relaxed campaign budget so that the bid strategy can optimize spend across the campaign.

Don't use budget to control spend in a Search Ads 360 bid strategy

Within each campaign, Search Ads 360 bid strategies never spend more than the budget you specify in the campaign's settings. If you want to control a bid strategy's spend, it's better to reduce the CPA target rather than lower the campaign's budget.

Think of the bid strategy's ROI target as the ideal spend amount, and the campaign budget as a secondary measure to prevent the bid strategy from going beyond the absolute maximum you'd ever want to spend.

If you have strict budget caps across a group of campaigns, an alternative approach is to lower your CPA/ERS target (or increase ROAS target) until 100% Impression Share is achieved. A lower CPA target can reduce the influence of budget constraints.

A bid strategy will bid high if it expects/calculates a decent return. Generally, bid strategies expect more volume when keywords participate in more auctions.